Sec. 50 applies only to seller of property and not to buyer of property

Facts

a)    Assessee purchased a property for a consideration of Rs. 48 lakhs. The Assessing Officer (AO) observed that the stamp duty value of such property was much higher than the consideration declared by the assessee.

b)    AO treated stamp duty value as fair market value of such property as per section 50C and, accordingly, made addition under section 69B by treating the differential amount as unexplained investment.

c)    CIT(A) set aside the order of AO by holding that section 50C applies only to seller of property and not to buyer of property.

d)    Aggrieved by the order of CIT(A), assessee filed the instant appeal before the tribunal.

The tribunal held in favour of assessee as under-

1)    Substitution of 'full value of consideration received' with 'the stamp value' in terms of section 50C, is applicable in the hands of the seller of the property who has to compute capital gains under section 48 pursuant to transfer of a capital asset in the nature of land or building or both.

2)    Hence, section 50C is a deeming provision which is applicable only for computation of capital gain in the case of seller of any land or building or both. The same cannot be extended to the case of the purchaser to estimate the undisclosed investment.

3)    Further, in order to invoke the provisions of section 69B, the burden is on the revenue to prove that the assessee has invested in property over and above what is disclosed in its balance sheet. There was nothing on record to show that the assessee had made any additional investment in addition to what had been stated in the books of account.

4)    Therefore, no addition could be made in the hands of the purchaser on the basis of stamp duty value- [2016] 67 taxmann.com 166 (Kolkata - Trib.)